FAIR TAX POLICY, REGULATION AND TRANSPARENCY
Philanthropy Colorado’s position: Tax policy plays an important role in supporting nonprofit and philanthropic organizations in strengthening vibrant communities. This includes tax credits and other means of spurring and sustaining charitable giving in the future. We oppose any new mandates that could negatively impact the sector’s ability to help communities in need, decrease charitable giving or hamper the availability and flexibility of donor-advised funds.
The second ask the Philanthropy Colorado team made of Colorado’s congressional delegation was for assistance in elevating our concerns about proposed regulations on Donor-Advised Funds (DAFs) to the IRS/Department of Treasury. The proposed rules would make two changes that could be devastating for Colorado’s community foundations and the people they serve:
- Broadly redefining “donor-advised funds” to encompass a wide range of pooled funding strategies community foundations have provided over recent decades to meet donor interests and encourage local giving. Such a change would restrict and delay the ability of community foundations to effectively support the community, particularly in disaster situations, while also creating additional burdens and risks.
- Restricting and imposing fees on the use of financial advisors for assets held in community foundation DAFs. This would create a disincentive for financial institutions to place client DAFs with community foundations and could undermine this critical giving vehicle. At the same time, community foundations would incur costs to expand their own capacity for asset management.
For a more thorough understanding, read the comments submitted by Philanthropy Colorado on the proposed DAF regulations.
IRS/Treasury will hold a hearing on the proposed DAF regulations on May 6, 2024.
To access the hearing by phone, send an email to publichearings@irs.gov requesting the telephone number and access code for the hearing. The subject line of the email should say: Request to ATTEND Hearing Telephonically for REG–142338–07 and must be received by 3 p.m. Mtn by May 1, 2024.
